Sundance Resources Limited (ASX: SDL) has provided the following information about activities for the quarter ended 30 June 2019.
· New AustSino, Noteholder Agreement entered into on 5 July 2019, replaces Previous Agreement with AustSino and Noteholders
· Non-binding Consortium Agreement signed between Sundance, AustSino and potential project partners, but no decision yet by the Cameroon Government on Mbalam Convention reinstatement
· Sundance shares remain in voluntary suspension
· $152,000 cash on hand as at 30 June 2019
End to Previous Agreement
Sundance announced on 3 April 2019 that the end date of the agreement between Sundance, Noteholders and AustSino dated 24 September 2018 (“Previous Agreement”) and as set out in Sundance’s ASX announcement of 25 September 2018 had been extended until 30 June 2019.
The parties agreed that unless the Mbalam Convention could be reinstated by 30 June 2019, then the Previous Agreement would be at an end. As that date has passed and the Mbalam Convention has not been reinstated, the Previous Agreement is no longer in force.
Sundance announced on 8 July 2019 that Sundance entered into a new agreement dated 5 July 2019 (“New Agreement”) with AustSino Resources Group (ASX: ANS) (“AustSino”) and the Noteholders of the Company being Senrigan Master Fund, Noble Resources International Pte Ltd, D. E. Shaw Composite Holdings International, Ltd, BSOF Master Fund L.P. Wafin Limited and David Porter (together, the “Noteholders”).
The terms of the New Agreement are described in the section below. Some of the key differences between the Previous Agreement and the New Agreement are as follows:
· The reinstatement of the Mbalam Convention is not a condition for the completion of the New Agreement.
· The cash payable by AustSino on completion of the New Agreement will reduce from $58M (payable on completion of the Previous Agreement) to $29M. Of this, $25M (previously $50M) will be paid to Noteholders and $4M (previously $8M) will be retained by Sundance.AustSino will still own approximately 50.2% of Sundance following the completion of the New Agreement, under which AustSino will receive approximately 11,153,846,154 shares issued at a price of $0.0026 per share (resulting in a change of control of Sundance).
· The number of options to be granted to the Noteholders is to be halved from 10 billion to 5 billion. The terms of those options (having an exercise price of $0.02 and expiry date of five years from the date of issue) are otherwise unchanged.
· AustSino will provide certain financial support to Sundance to part-support its working capital requirements until completion of the New Agreement. Sundance may also seek support from other parties. The support of AustSino will be via an initial $200,000 placement of ordinary shares to AustSino at an issue price of $0.00375 per share, resulting in the issue of 53,333,333 shares to AustSino (“Initial Placement”). The Initial Placement was to occur within 5 business days of the New Agreement announcement on 8 July 2019 but was completed by 12 July 2019. After the Initial Placement and within 5 business days following a request by Sundance, AustSino is required to pay $100,000 per month to Sundance in return for the issue of ordinary shares in Sundance at an issue price of $0.00375 up to an aggregate of $600,000 (including the initial $200,000) (Financial Support Arrangement). The total number of ordinary shares potentially to be issued by Sundance to AustSino under the Financial Support Arrangement is 160,000,000 ordinary shares. In lieu of subscribing for additional Sundance shares, AustSino may instead require that amounts paid under the Financial Support Arrangement be deducted from the $29 Million purchase price payable by AustSino on Placement Completion. Neither the Initial Placement nor any subsequent placement of shares under the Financial Support Arrangement will require Sundance shareholder approval.